Early this month, we mentioned that The Mega Bull Market In Lithium Is Resuming. In this post, we follow up on the significant bounce in spot lithium in recent weeks, where price is stabilizing right now and lithium investing implications.
As said, we believe the lithium market is not in a runaway state. We wrote: “It will start slowly, obviously, but accelerate later this year, as per our current expectations expressed in our lithium forecast 2023.”
As a refresher, this is the summary of our lithium forecast:
Several factors contribute to the positive forecast for lithium stocks. These include the anticipated growth in EV sales, government initiatives promoting clean energy, and advancements in battery technology. It also mentions specific lithium stocks that are well-positioned to benefit from this trend. Investors should consider lithium stocks as part of their investment strategy, given the expected surge in demand and the potential for substantial returns in the coming years.
Important to note is that the lithium mega bull market will move in cycles. Most likely, there will be 3 phases in the mega bull market, with 2 corrective waves.
We can reasonably expect the recent corrective wave to be complete now. The 2nd phase of the bull market should be resuming.
Spot Lithium Price Analysis
Taking a closer look at the spot lithium price chart (in China), we observe a substantial drop in prices followed by a recent bounce. Notably, the price has been stabilizing around the 300 CTY/k level, which holds significance as it represents the 50% retracement level from the mega rally that began in 2021.
Implications for Lithium Investors
The stabilization of spot lithium prices at this key retracement level indicates that lithium may be moving towards its “sweet spot.” This development suggests a positive outlook for lithium miners, as the recovery of spot lithium prices can have a favorable impact on their profitability. Moreover, several lithium miners may continue their long-term uptrend, providing potential opportunities for investors.
While the specific lithium miners poised for success are not explicitly mentioned in this article, further investigation and analysis can be conducted through premium services. Such services can provide valuable insights into identifying the lithium mining companies that are best positioned to benefit from the stabilizing spot lithium prices.
Conclusion
Despite the recent decline in spot lithium prices, the long-term demand for lithium remains strong, primarily driven by the growth of the EV industry and renewable energy sector. The stabilization of spot lithium prices at the key retracement level offers promising prospects for lithium stocks. As global EV demand continues to rise, particularly in China, which is experiencing a resurgence in EV demand, the outlook for lithium miners becomes increasingly positive.
Investors interested in capitalizing on the potential recovery and long-term uptrend of lithium stocks should consider reading our top lithium & graphite selection. In it, we share a very clear investing strategy based on risk/reward considerations. Moreover, out of hundreds of lithium & graphite stocks, we did make a selection of a shortlist of some 15 stocks, based on fundamental analysis (including grades, deposit size, year of production, location). Lithium & Graphite – Top Stocks Selection >>